Reserve Bank of India, after setting up of the Board for
Payment and Settlement Systems in 2005, released a vision document
incorporating a proposal to set up an umbrella institution for all the RETAIL
PAYMENT SYSTEMS in the country. The core objective was to consolidate and
integrate the multiple systems with varying service levels into nation-wide
uniform and standard business process for all retail payment systems. The other
objective was to facilitate an affordable payment mechanism to benefit the
common man across the country and help financial inclusion.

National Payments Corporation of India (NPCI) was incorporated
in December 2008 and the Certificate of Commencement of Business was issued in
April 2009. It has been incorporated as a Section 25 company under Companies
Act and is aimed to operate for the benefit of all the member banks and their
customers. The authorized capital has been pegged at INR300 crore (US$56.7
million) and paid up capital is INR60 crore (US$11.34 million) so that the
company can create infrastructure of large dimension and operate on high volume
resulting payment services at fraction of the present cost structure.

NPCI would function as a hub in all electronic retail
payment systems which is ever growing in terms of varieties of products,
delivery channels, number of service providers and diverse Technology
solutions.

NPCI has a mandate to create a domestic card scheme.The
Brand name finalised for the same is RuPay. This scheme would be similar to
domestic card schemes one of which is China UnionPay in China. China UnionPay
(CUP) was a national agenda for a few years by mandating all domestic
transactions to be routed through the national card system. Now China UnionPay
cards are accepted in 26 countries. The card base is 1.8 billion. Bulk of the
payments are made in China by CUP cards. Although it may not be possible to
mandate such transaction flow in India, a domestic card is not a distant dream
if all banks work in a co-operative framework. NPCI can reach the scale of
China UnionPay by excelling in service quality and by placing the next
generation products and services.

Vocalink in UK provides another benchmark for NPCI. Vocalink
facilitates money transfer from any bank account to any other bank account in
UK on a real time 24 x 7 basis. This implies that the experience of RTGS has
been extended to retail payment segment. Now that more than 60,000 bank
branches in the country are covered under Core Banking Solution, this is very
much a feasible proposition in India and would be known as India MoneyLine.

NPCI would also benchmark against Bankserv in South Africa
and KFTC in South Korea in terms of operational efficiency, reach across the
country and range of products and services.